Mortgage Advice Bureau say that average deposits rose in nine out of eleven regions in October. As a result, the average purchase deposit reached £71,301: a monthly increase of 0.9% and annual rise of 3.5%.
The largest monthly increase in average deposits took place in East Anglia, where typical deposits rose 11.6% month-on-month from £46,504 to £51,877. This is also a 26.6% increase compared to October 2014 (£40,966). At the same time, typical loans in the region have decreased (from £132,325 in September to £125,039), suggesting borrowers are putting forward more of their own funds as house prices rise.
Average deposits remain highest in London, where they have risen from £170,328 in September to £179,248: an increase of 5.2%. However, help for first-time buyers in the capital is on the horizon. Chancellor George Osborne announced in his Autumn Statement that London will be given a dedicated Help to Buy scheme, offering buyers with a 5% deposit a loan of up to 40% of the value of a new build home, interest-free for five years. Based on London’s average house price in October (£533,922), this means borrowers in the capital would pay a far more affordable £26,696 deposit.
The Help to Buy equity loan scheme for the rest of the country – offering a 20% equity loan – has been extended until 2021 to help first-time buyers struggling to save for a deposit outside of the capital.